A neglected sector

In a developing country blessed with fertile lands and other natural resources, agriculture should be a key driver of economic growth. Instead, the share of the agriculture sector in economic development is shrinking and agricultural growth has slowed down in the past years.

This is according to Arsenio Balisacan, who recently ended his stint as economic planning secretary to become chairman of the Philippine Competition Commission. Agriculture provides jobs to about 30 percent of the population. But Balisacan said that employment in the sector has declined from 12.04 million at the end of 2009 to 11.48 million last year.

Balisacan stressed that an average annual growth rate of even three to four percent, sustained over two decades, in the agriculture sector could make a significant dent on poverty. Instead the share of the sector in overall economic development has contracted significantly from 20 percent in the 1970s to only 10 percent in 2015, with the average annual growth rate plunging from nearly five percent in 2014 to a disheartening 0.2 percent in 2015.

With a strong, drought-inducing El Niño this year, the sector could shrink further. Other economic experts have lamented a general neglect of the agriculture sector by the national government. Poor infrastructure and insufficient support services deprive farmers of access not only to export markets but even to local outlets for their crops.

Such services are urgently needed with the creation of the ASEAN Economic Community. With regional tariffs consequently easing progressively on agricultural goods, an influx of imports could kill local crops. Local producers need improved farming methods and technologies that will allow them to stay competitive in a tough international market. Small farmers need support for fertilizers and seeds for high-yield crops, access to finance and equipment, sufficient irrigation and transportation infrastructure.

There’s also a wide room for growth in livestock breeding, dairy production and aquaculture. Livelihood and employment opportunities generated by agribusiness can lift rural communities from poverty.

Even the World Bank has called on developing nations to give priority to policies boosting the agriculture sector. Many advanced economies did this on their road to prosperity. The Philippines must get its priorities right.